Endeavor plans to raise over $500 million in IPO
Endeavor Group Holdings Inc., the owner of talent agency WME, Endeavor Content and sports league UFC, plans to raise around $511 million in its initial public offering, valuing the company at about $10 billion.
The entertainment company filed an amended prospectus with the Securities and Exchange Commission on Tuesday laying out its plans to sell 21.3 million shares at $23 to $24 a share. Endeavor will also raise some $1.7 billion in a private sale and use about $437 million to purchase the remaining 49% of the UFC that it doesn't currently own.
This would be Endeavor's second attempt to go public after it scrapped its much-anticipated IPO in September 2019 a day before its shares were expected to begin trading on the New York Stock Exchange, citing hazardous market conditions.
The offering was expected to raise as much as $600 million and valued the firm at $8 billion. It also was supposed to bankroll Ari Emanuel and Patrick Whitesell’s ambitious plans to build the media company of the future and fund future acquisitions while paying down its heavy debt load, then listed at $4.6 billion.
Endeavor, based in Beverly Hills and founded in 1995, also owns production company Endeavor Content and sports agency IMG. The company generated $3.47 billion in revenue in 2020, with a net loss of $625.3 million, according to paperwork filed with the SEC last month.
The IPO is expected later this year; it could come as early as this month. It would mark the first public offering by a Hollywood agency owner — and an opportunity for redemption for the company’s founder.
The IPO comes on the heels of a difficult period. Like the rest of the entertainment industry, Endeavor has been hard hit by the COVID-19 pandemic, which ground Hollywood to a virtual standstill.
Last March, the company announced salary cuts and layoffs across the company, with Emanuel and his partner Executive Chairman Whitesell forgoing their own salaries for the year. Emanuel and Whitesell, however, earned bonuses of more than $6 million and $2 million, respectively, according to the filings.
In May, Endeavor sold off part of its stake in Epic Games, publisher of the popular title “Fortnite,” for an estimated $80 million. The same month, Endeavor disclosed it had raised $260 million in a debt offering, mainly from investment firm Oaktree Capital. The loan, arranged by JPMorgan Chase, was used to fund operations during the pandemic
WME and other top agencies also are grappling with the terms of new agreements with the Writers Guild of America. Under a recently announced deal, WME and its investor Silver Lake will reduce their ownership stake in Endeavor Content to 20% or less and will also end packaging — in which an agency collects fees for pulling together talent for projects — by the end of June 2022.
Still, Endeavor has continued to expand. In November 2019 it acquired the speaking-engagement firm Harry Walker Agency. In January 2020 it snapped up On Location Experiences, an events business started by the National Football League, for $600 million.
"As challenging a year as 2020 was, it underscored the strength, creativity, and resilience of our people who mobilized time and time again in the face of overwhelming odds. We made difficult decisions but worked as a team to find creative solutions and best position the business for the future," wrote Emanuel in the prospectus' letter from the CEO.
This story originally appeared in Los Angeles Times.
